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Issues Involved:
1. Whether the Commissioner of Income-tax (Appeals) was justified in confirming the order of the Assessing Officer treating the sum of Rs. 1,50,000 given by the assessee as chargeable gift under the Gift-tax Act. Issue-wise Detailed Analysis: 1. Confirmation of Gift by the Commissioner of Income-tax (Appeals): The primary issue in this case was whether the sum of Rs. 1,50,000 transferred by the assessee to Smt. P. Sarada, Kum. Darsana, and Kum. Sunitha constituted a chargeable gift under the Gift-tax Act. The Assessing Officer noticed that the assessee transferred Rs. 1,50,000 from his savings account without showing any loan or liability in his wealth statement. The assessee contended that the amount was given by Shri Ramachandra Panicker, a family friend, to be handed over to his daughter and grand-daughters for the construction of a house. The Assessing Officer, however, did not find the explanation credible and treated the amount as a gift, citing lack of evidence and inconsistency in the assessee's statements. 2. Evaluation of Evidence and Statements: During the assessment, the assessee provided a confirmation letter from Shri Panicker, stating that he had entrusted Rs. 1,50,000 to the assessee in 1988 to be given to his daughter as a loan. The Assessing Officer questioned the plausibility of a father entrusting such a sum to a third party and pointed out that the amount was placed in fixed deposits rather than being used for immediate construction needs. The Commissioner of Income-tax (Appeals) upheld this view, noting contradictions in the assessee's explanations and the lack of documentary evidence to support the claim that the money was a loan from Shri Panicker. 3. Legal Definition and Burden of Proof: The Tribunal examined the definition of "gift" under the Gift-tax Act, which requires the transfer to be voluntary and without consideration. The assessee denied making any gift and produced a confirmation letter from Shri Panicker. The Tribunal emphasized that the primary burden was on the Assessing Officer to prove that the transferred amount belonged to the assessee and constituted a gift. The Tribunal found that the Assessing Officer failed to examine Shri Panicker or Smt. Sarada to verify the claims. The Tribunal also noted that the absence of the amount as a liability in the wealth-tax return could not be the sole reason to treat the transfer as a gift. 4. Tribunal's Conclusion: The Tribunal concluded that the transfer of Rs. 1,50,000 by the assessee to Smt. Sarada and her daughters did not constitute a gift under the Gift-tax Act. The Tribunal found the explanation provided by the assessee plausible and criticized the Assessing Officer for not thoroughly investigating the claims. The Tribunal set aside and canceled the assessment made by the Assessing Officer, thereby allowing the assessee's appeal. Judgment: The appeal by the assessee was allowed, and the assessment treating the amount as a gift under the Gift-tax Act was set aside.
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